EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610741
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Anaconda Stores Pty Ltd applied for a TCO in respect of certain lanterns on 26 June 2006.
Instrument
TCO No 0610741 was made on 15 September 2006. It declares that those certain lanterns are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0610741 is taken to have come into force on 26 June 2006.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, addresses the need for a systematic approach to applying tariff concessions on imported goods, ensuring that businesses can benefit from lower duty rates on certain goods. This Act establishes a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on specified goods. The legislative intent behind this is to foster economic efficiency and competitiveness by reducing the cost of importing certain goods that are not produced domestically, or are produced domestically but not in sufficient quantities to meet demand.
The Tariff Concession Instrument No. 0610741 was introduced to provide a specific tariff concession for certain lanterns, as applied for by Anaconda Stores Pty Ltd. The instrument was issued after the CEO was satisfied that no substitutable goods were produced in Australia, aligning with the core criteria set out in the Customs Act 1901. The instrument effectively reduced the duty on these lanterns from the general rate of 5% to 0%, which came into effect from the date of the application, 26 June 2006. The CEO published a notice in the Gazette inviting submissions but received none, thereby allowing the instrument to proceed without any objections. This instrument ensures that the rights of importers are protected and can benefit from a refund of duties on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0610741 applies to the goods specified in the Instrument, namely certain lanterns, and is governed by Part XVA of the Customs Act 1901. The Act applies to entities or individuals seeking tariff concessions for goods imported into Australia. The Instrument was made by the Chief Executive Officer of Customs, who has the authority to approve Tariff Concession Orders (TCOs) under the Act. The Instrument extends its application to the lanterns specified in it, providing a zero per cent duty rate for these goods as opposed to the general rate of 5 per cent. This concession applies nationally, impacting the import duties on these specific lanterns across Australia. There are no exclusions or exemptions stated in the Instrument, and it does not affect the rights of any person except to beneficially affect importers who can apply for duty refunds on these goods imported since the date the TCO was deemed to come into force. The Instrument does not impose any liabilities on any person. The scope of the Act may be further extended or restricted through subordinate instruments, although this specific Instrument does not indicate any such extensions or restrictions.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0610741 under the Customs Act 1901 (section 269F) allow for the application of Tariff Concession Orders (TCOs) by interested parties such as Anaconda Stores Pty Ltd, who applied for a TCO for certain lanterns on 26 June 2006. If the Chief Executive Officer (CEO) of Customs is satisfied that the application complies with the core criteria (section 269C), a TCO is issued. The CEO must be satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). Once issued, the TCO declares that the specified goods will attract a lower rate of customs duty, as outlined in the Customs Tariff Act 1995 (section 269P(3)). For Anaconda Stores, the general rate of duty of 5% was reduced to 0% for the specified lanterns.
The obligations imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO is required to publish a notice in the Gazette (section 269K(1)) inviting submissions from any interested parties who may oppose the TCO. In this case, no submissions were received, and the CEO proceeded to issue the TCO. Importers of the goods subject to the TCO are entitled to apply for a refund of duty paid on goods imported since the date the TCO was deemed to have come into force (Regulation 126(1)(r)).
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. While the Explanatory Statement does not detail specific offences or penalties, breaches of the Act generally could lead to civil or criminal consequences. For instance, knowingly supplying false information in an application for a TCO could potentially lead to fines or imprisonment, depending on the severity and intent behind the breach. The exact penalties would be determined by the courts based on the specific nature of the offence under Australian law.